Climate Policy under Sustainable Discounted Utilitarianism



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2015 2025 2035 2045 2055 2065 2075 2085 2095 2105 2115 2125 2135 2145 2155 2165 2175 2185 2195 2205


BAU

2CO2

1.5CO2


Figure 1: Probability of falling consumption per capita for three emissions abatement
policies (business as usual, 2 CO
2 and 1.5 CO2).

about climate policy. Figure 1 presents estimates of the probability that, for each
of these three policies, c
t > ct+1 with respect to any two successive time periods
between 2005 and 2205.

Figure 1 shows that the probability of falling consumption per capita is positive,
but very small, under all three policies. Indeed, for the coming century, the probabil-
ity is virtually the same across the three policies, despite the very different emissions
control rate under business as usual compared with those under the two abatement
policies. This can be attributed to two causes. First, climate damage can be so large
as to drive consumption growth negative, irrespective of the emissions controls put in
place.
11 Second, our assumption of a normally distributed initial growth rate of TFP
makes it possible that TFP falls and takes consumption per capita with it. However,
what Figure 1 clearly shows is the pay-off to abatement in the 22
nd century, when

11In fact, Figure 1 shows that aggressive initial emissions abatement along the 1.5 CO2 policy path
actually makes matters worse for a time, as the high initial cost of abatement drives consumption
growth negative earlier than under the other two policies in one of the 1000 draws.

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